When we lose a loved one, it is common to hear the advice that we should not make any major decisions for at least one year following the loved one’s death. The idea behind this adage is that grief can cloud our judgment, and we may not be in the best frame of mind to make significant life changes or choices that could have long-term consequences. While this advice is well-intentioned and can be applicable in some situations, it is not always feasible, especially when it comes to handling the various financial and legal matters that arise in the wake of someone’s passing.
In reality, several critical decisions and tasks must be accomplished within the first year after death. For example, estate tax returns and final personal income taxes need to be filed with the Department of Revenue in the Commonwealth of Massachusetts and Internal Revenue Service. In particular, if an estate tax return is required, it typically must be filed within nine (9) months of the deceased’s date of death, although the deadline may be extended by six (6) months, if necessary. Failing to take action within the required timeframes can result in costly penalties.
Given the importance of these first-year responsibilities, it is essential to think carefully about who you name as a fiduciary in your estate planning documents. When you are choosing a Personal Representative or Trustee, name a person you trust implicitly and who is responsible and capable of making difficult decisions under pressure. They should also be willing and able to take on the significant responsibilities that come with the role, especially during that challenging first year. By selecting a fiduciary who is up to the task, you will ensure that your loved ones are protected and that your final wishes are carried out as smoothly as possible, even in the face of grief and loss.
At Samuel, Sayward & Baler LLC, a knowledgeable attorney will guide you through the selection of an appropriate fiduciary to appoint so that you may rest assured that those important (tax) responsibilities will be addressed in a timely manner after your passing.
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Many people create a Trust as part of their estate plan. A Trust can be used to avoid probate, reduce estate taxes, manage assets for beneficiaries and provide creditor protection for an inheritance. A key element of a Trust is the Trustee. The Trustee is the person charged with carrying out the Trust maker’s instructions — “this is the big job.” Choosing the right Trustee is a key element to ensuring the estate plan you create will achieve your goals. So how do you choose the right person to serve as Trustee? Here are five questions to ask yourself about the person you are considering.